ISLAMABAD: The Moody’s Investor Service has said the International Monetary Fund’s approval of a $1 billion disbursement to Pakistan under its $6 billion loan program was “credit positive” and would help Pakistan shore up its foreign exchange reserves.
The disbursement brings Pakistan's total draw against the Extended Fund Facility program for budget support to about $3 billion. The program was initially approved in July 2019.
“The successful disbursement is credit positive, shoring up Pakistan's foreign-exchange reserves, which have faced significant pressures in recent months amid a sharp widening in the current-account deficit as higher global oil and commodity prices contributed to a yawning goods trade deficit,” Moody’s said.
From July to December 2021, the current-account deficit was a cumulative $9.0 billion, compared with a surplus of $1.2 billion during the same period a year earlier. The rapid widening in the current-account deficit led to a drawdown in foreign-exchange reserves, which declined to $14.4 billion in November 2021 from $18.9 billion in July 2021, according to IMF data. The injection of $3 billion financing from Saudi Arabia to Pakistan in December boosted the latter's foreign reserves to $16 billion in that month.
“We project the current-account deficit will widen to 3.0%-3.5% of GDP in fiscal year 2022 (ending June 2022),” Moody’s said. “The IMF disbursement will partially offset pressures on foreign exchange reserves, while facilitating further financing from other official sources.”
“Thereafter, we expect a moderation in global oil and commodity prices to contain growth in the import bill, while the ongoing global economic recovery supports exports and remittance inflows. As a result, we assume that the current-account deficit will narrow and stabilise at 2%-3% of GDP through the subsequent two to three year period.”
Moody’s said though the IMF had acknowledged the greater credibility of Pakistan's macroeconomic and fiscal management, it also noted the need for further structural reforms, particularly in the energy and state-owned enterprise sectors, to foster a business environment conducive to investments and private sector development.
IMF disbursement acknowledges Pakistan’s reform progress, shores up forex reserves — Moody’s
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IMF disbursement acknowledges Pakistan’s reform progress, shores up forex reserves — Moody’s
- International Monetary Fund this week approved $1 billion disbursement to Pakistan under $6 billion loan program
- Moody’s says current-account deficit will narrow and stabilise at 2%-3% of GDP through subsequent two to three year period
Pakistan government, ex-PM Khan party to again meet on Jan. 2 in bid to ease political tensions
- Khan’s ouster in a parliamentary vote of no-confidence in 2022 has plunged the country into a prolonged political crisis
- Both sides last week held first round of talks after the ex-premier threatened a civil dissidence movement in the country
ISLAMABAD: Ayaz Sadiq, speaker of the lower house of Pakistan’s parliament, has summoned an in-camera meeting of negotiation teams of the government and the opposition on Jan. 2, the National Assembly Secretariat said on Monday, amid efforts to ease prolonged political tensions in the country.
The development came a week after the government and the opposition Pakistan Tehreek-e-Insaf (PTI) party of former prime minister Imran Khan held the first round of formal negotiations on Dec. 23, with the PTI asked to present its demands in writing at the next session.
Khan’s ouster in a parliamentary no-trust vote in 2022 has plunged Pakistan into a political crisis, particularly since the PTI founder was jailed in August last year on corruption and other charges and remains behind bars. His party and supporters have regularly held protests calling for his release, with many of the demonstrations turning violent.
“The Honorable Speaker, Sardar Ayaz Sadiq, will chair a 2nd meeting (in-camera) on negotiations between Treasury and Opposition on Thursday, the 2nd of January, 2025,” the National Assembly Secretariat said in a notification on Monday.
Khan previously rejected talks with the government, saying his party would only talk to the “real powerbrokers” in Pakistan, the all-powerful army, but earlier this month he set up a negotiating committee of top party members to open a dialogue with the government for the fulfilment of two demands: the release of political prisoners and the establishment of judicial commissions to investigate protests on May 9 last year and Nov. 26 this year, which the government says involved his party supporters, accusing them of attacking military installations and government buildings.
The talks opened days after Khan threatened a civil dissidence movement and amid growing concerns he may face trial by a military court for allegedly inciting attacks on sensitive security installations during the May 9 protests.
Sadiq last week said the first round of talks were held in a “cordial” environment, calling them vital to end “political polarization” in the country.
“Since some members of the opposition could not join the talks today, we have decided to hold the next meeting on Jan. 2,” he said on Dec. 23. “The opposition will also present a charter of demands in the meeting.”
Speaking to the media after the talks, Khan’s close aide, Asad Qaiser, said the PTI team had asked the government to release all political prisoners, including the former prime minister, and form a judicial commission, comprising senior Supreme Court judges, to probe the May 9 and Nov. 26 protests.
“We should be allowed to hold a meeting with Imran Khan,” Qaiser said. “He is our leader. We will move forward with his instructions.”
The negotiations came days after Pakistan’s military announced prison sentences for 25 people involved in the May 9 protests, which PTI has demanded be investigated. The PTI has also repeatedly said it fears the government and military will try Khan in army courts for the May 9 violence. He is already being tried for the violence in a civilian court.
Pakistan stocks surge by more than 3,000 points on hopes of policy rate cuts
- Investor activity remained vibrant on Monday, with a total volume of 1,058 million shares traded
- Pakistan cut its key policy rate by 200 basis points to 13 percent on Dec. 16, marking fifth straight reduction
ISLAMABAD: The Pakistan Stock Exchange (PSX) opened the week on a positive note and surged by more than 3,000 points on Monday, amid hopes of further policy rate cuts.
The benchmark KSE-100 index soared by 3,907 points, or 3.51 percent percent, to close at 115,258 points, compared to Friday’s close of 111,351 points.
Investor activity remained vibrant, with a total volume of 1,058 million shares traded and a turnover of Rs40.8 billion, while hopes of further policy rate cut boosted market confidence.
“This upward momentum was fueled by optimism surrounding anticipated increases in equity fund allocations by local institutions ahead of the new year,” Topline Securities said in its market review.
“Adding further impetus was a statement from the finance minister over the weekend, suggesting a potential decline in interest rates to single-digit levels in the future.”
Pakistan’s central bank cut its key policy rate by 200 basis points to 13 percent on Dec. 16, it said in a statement. This was a fifth straight reduction since June as the country keeps up efforts to revive a sluggish economy with inflation easing.
The move followed cuts of 150 bps in June, 100 in July, 200 in September, and a record cut of 250 bps in November, that have taken the rate down from an all-time high of 22 percent, set in June 2023 and left unchanged for a year. It takes the total cuts to 900 bps since June.
Pakistan’s economy also grew by 0.92 percent in the first quarter of the fiscal year 2024-25, despite a contraction in the industrial sector, according to data approved by the National Accounts Committee, and released by its Statistics Bureau on Monday.
The growth was driven by positive performances in the agriculture and services sectors, which grew by 1.15 percent and 1.43 percent, respectively, in the first quarter of the fiscal year which ends in June 2025.
Pakistan reports 68th polio case of this year amid virus resurgence
- Pakistan on Monday began a week-long anti-polio vaccination in worst affected Balochistan province
- Pakistan, along with neighboring Afghanistan, remains the last polio-endemic country in the world
ISLAMABAD: Pakistan has reported another case of polio virus in its northwestern Khyber Pakhtunkhwa (KP) province, authorities said on Monday, taking the nationwide tally to 68 this year.
Polio is a paralyzing disease that has no cure. Multiple doses of the oral polio vaccine and completion of the routine vaccination schedule for all children under the age of five is essential to provide children high immunity against this terrible disease.
The Regional Reference Laboratory for Polio Eradication at the National Institute of Health (NIH) Islamabad confirmed the wild poliovirus type 1 (WPV1) case in KP’s Dera Ismail Khan district. This is the 10th polio case of the district this year.
“Pakistan is responding to the resurgence of WPV1 this year,” the country’s polio program said in a statement. “It is crucial for parents to ensure vaccination for all their children under the age of five to keep them protected.”
Of the 68 cases reported this year, 27 were from Balochistan, 20 from Khyber Pakhtunkhwa, 19 from Sindh, and one each from Punjab and Islamabad, according to the polio program.
It said a sub-national polio vaccination campaign was conducted across Punjab, Sindh, KP, Azad Kashmir, Gilgit-Baltistan and Islamabad on December 16–22, vaccinating over 42 million children.
The Balochistan government had postponed the anti-polio drive for two weeks due to security threats and a lack of preparedness stemming from a boycott of the campaign by provincial health staff.
“The campaign’s second phase started today [Monday] in Balochistan,” the polio program said. “To keep children safe, it is critical for parents to welcome vaccinators among them and bring their children forward for vaccination.”
Pakistan, along with neighboring Afghanistan, remains the last polio-endemic country in the world.
Pakistan’s economy grows 0.92 percent in Q1 of ongoing fiscal year
- The country is navigating a challenging economic recovery path and has been buttressed by a $7 billion facility from the IMF
- The growth was driven by positive performances in agriculture and services sectors, which grew by 1.15 percent and 1.43 percent, respectively
KARACHI: Pakistan’s economy grew by 0.92 percent in the first quarter of the fiscal year 2024-25, despite a contraction in the industrial sector, according to data approved by the National Accounts Committee, and released by its Statistics Bureau on Monday.
The South Asian country is navigating a challenging economic recovery path and has been buttressed by a $7 billion facility from the International Monetary Fund (IMF) in September.
The growth was driven by positive performances in the agriculture and services sectors, which grew by 1.15 percent and 1.43 percent, respectively, in the first quarter of the fiscal year which ends in June 2025.
Pakistan’s economy grew by 2.69 percent year-on-year in the first quarter of the previous 2023-24 fiscal year.
However, the industrial sector contracted by 1.03 percent, mainly due to a decline in mining and quarrying activities during July-September, read the report.
The committee compiling the national accounts approved the introduction of quarterly estimates of expenditure of the economy.
On the basis of latest figures of the national accounts aggregates for the last fiscal year, the overall size of the economy stood at 105.6 trillion Pakistani rupees ($379.31 billion).
Annual per capita income in rupees was recorded at 472,263 Pakistani rupees ($1,696.35).
The committee also approved an updated annual growth rate for the last fiscal year 2023-24, which stood at 2.50 percent, slightly lower than the previously estimated 2.52 percent.
Pakistan’s new Gwadar airport set to launch flights to Muscat from Jan. 10
- The Chinese-funded airport is capable of handling A-380 aircraft and accommodating up to 4 million passengers annually, PM’s Office says
- The start of operations at Gwadar airport was delayed because of security review due to militant attacks in Pakistan’s Balochistan in August
ISLAMABAD: Pakistan’s new Gwadar International Airport is set to begin flights to Muscat from January 10, the Pakistan prime minister’s office announced on Monday, following a months-long delay in the opening of the airport.
A security review prompted by deadly attacks by separatist militants in Balochistan in August delayed the airport’s opening to the end of this year. The $200-million Chinese-funded airport, which will handle both domestic and international flights, is expected to become one of Pakistan’s largest, according to the Pakistan Civil Aviation Authority.
China has pledged over $65 billion in infrastructure, energy and other projects in Pakistan under the China Pakistan Economic Corridor (CPEC). Part of President Xi Jinping’s Belt and Road Initiative, the program in Pakistan is also developing a deep-water port close to the new airport in Gwadar, a joint venture between Pakistan, Oman and China that is close to completion.
On Monday, Prime Minister Shehbaz Sharif presided over a meeting to discuss the airport’s operations and directed authorities to develop a strategy to establish it as a major transit hub, emphasizing the need to improve road connections between the airport and other parts of the country, particularly Balochistan.
“Flights from Gwadar to Muscat will start from Jan.10 next year,” the PM’s office said in a statement. “The Gwadar airport can handle A-380 aircraft and will be capable of accommodating 4 million passengers annually.”
The statement noted that the Gwadar International Airport has obtained necessary certifications from the Pakistan Airports Authority. Additionally, personnel from the Airports Security Force, Pakistan Customs, Anti-Narcotics Force, Federal Investigation Agency, and Border Health Services have been deployed at the airport.
The Pakistan International Airlines (PIA) plans to increase flights between Karachi and Gwadar to three times a week, while discussions are ongoing with private airlines and carriers from China, Oman and the United Arab Emirates (UAE) to launch both domestic and international services, according to the PM’s office. The airport will feature various facilities, including cold storage, cargo sheds, hotels and shopping malls, with banking services arranged through the State Bank of Pakistan.
Although no Chinese projects were targeted in militant attacks in August, they have been frequently attacked in the past by separatists who view China as a foreign invader trying to gain control of impoverished but mineral-rich Balochistan, the site of a decades-long insurgency.
Recent attacks, including one in which two Chinese workers were killed in a suicide bombing in Karachi, have forced Beijing to publicly criticize Pakistan over security lapses and there have been widespread media reports in recent weeks that China wants its own security forces on the ground to protest its nationals and projects, a demand Islamabad has long resisted.
In his remarks, Sharif highlighted that the Gwadar International Airport symbolized the strong China-Pakistan friendship, expressing gratitude to Beijing for constructing an airport with international standards and modern facilities. He also directed the implementation of comprehensive security measures at the airport.
The meeting was attended by Defense Minister Khawaja Asif, Law Minister Azam Nazeer Tarar, Economic Affairs Minister Ahsan Khan Cheema, Finance Minister Muhammad Aurangzeb, and senior government officials. Deputy PM Ishaq Dar, along with Federal Minister for Privatization, Investment, and Communications Abdul Aleem Khan, also participated via video link.
